Crude oil prices were up to begin Wednesday after tension between the U.S. and Iran escalated, posing risks for the secure supply of oil from the Middle East while also raising fears that it could develop into a military conflict.
International benchmark Brent crude was trading at $65.44 per barrel at 0615 GMT for a 0.5% gain after it closed Tuesday at $65.08 a barrel.
American benchmark West Texas Intermediate was at $59.11 a barrel at the same time for a 0.5% increase after ending the previous session at $58.80 per barrel.
U.S. President Donald Trump said Tuesday via Twitter that “Any attack by Iran on anything American will be met with great and overwhelming force.”
“Sadly, the thing they do understand is Strength and Power, and the USA is by far the most powerful Military Force in the world…” he added.
Earlier, Iran said that on July 7 it would abandon some of its commitments made in the 2015 nuclear deal. Tehran had said on May 8 that it would suspend two of its pledges in the nuclear deal, and gave Russia, China, and Europe two months to resolve U.S. sanctions.
The tensions between Iran and the U.S. intensified after a number of oil vessels were attacked near the world’s largest oil transit chokepoint; the Strait of Hormuz. While Washington blamed Tehran for the attacks, Iran denied any involvement.
The conflict boiled over after a U.S. drone was shutdown last week by Iran. Washington said the drone was hit on international waters, however, Tehran contends it violated its airspace.